You might consider holding the deed in escrow, subject to getting the note.

Eventhough they will charge you they are usually worth every penny.Always remember to do a math analysis and try to look at the subject prospective properties before you make an offer or at least have a clause in the sales contract that allows you the time (usually 10 to 15 days) to make a detailed inspection and possibly back out of the deal without a penalty that hurts you too bad.  

It's possible these could also be subject to the same claw backs...

Being a OO, you might get your earnest money back-They have no duty to disclose based on your inspection report moving forward more than likely they will not disclose-You can get an FHA loan (subject to the appraisal finding the condition acceptable). 

While federal and possibly state taxes still apply to the distribution even when the funds are used for the purchase of a primary residence, the 10% early distribution penalty if you are under age 59 1/2 does not apply when a distribution is taken from an IRA to pay for certain first-time homebuyer expenses (subject to specific dollar limitations) (IRC Sec. 72(t)(2)(F)).A qualified first-time homebuyer distribution is any distribution received by an individual to the extent that the distribution is used by the IRA owner before the close of the 120th day after the day on which the distribution is received.

All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.That appears to close the loophole. 

@Ben RobertsIn your contract insert the words "subject to" your neighbor being confirmed by the court as the PR.

Which renders you subject to business, net profit, and school tax filings each year. 

Also keep in mind that if the basement is below grade it won't meet minimum standards of fitness for human habitation:"No room or area in a dwelling may be used for habitation if more than 1⁄2 of its floor-to-ceiling height is below the average grade of the adjoining ground and is subject to chronic dampness."

Sahegin, see the attached HardMoney worksheet from BP which outlines some of the expenses including points, holding cost etc., This might help a bit.